Virtual and AI16Z, who will have the last laugh in the AI ​​wave?

Background: Virtual and AI16Z have now become the dominant AI agents

AI Agent swept through Q4 of 2024, and the popularity will not decrease in 2025. As of early January 2025, the AI ​​Agent market continues to heat up, and the overall market value has exceeded US$16.9 billion, an increase of approximately 22.7% from the previous week.

Virtuals Protocol is the main AI Agent issuance platform on the Base chain. The market value of its platform currency VIRTUAL has exceeded US$5 billion, ranking among the top 40 cryptocurrencies. In the Solana ecosystem, ai16z, as a venture capital institution managed by AI Agent, has a market value of more than US$2.5 billion.

The above two major agreements have become the wind direction for observing the AI ​​Agent track. What are the similarities and differences between them? What is the difference in development routes? Let WOO X Research show you.

Development history

• Virtuals Protocol: From game guild to AI Agent distribution platform

The agreement was formed by a Malaysian team in 2021. They focused on transactions at the beginning of the year. As time went by, they saw many projects financing and establishing game guilds, and they also wanted to ride on this wave, so in December 2021 In March, it raised US$16 million at a valuation of US$600 million, and the gaming guild PathDAO was established, which is also the predecessor of Virtuals Protocol.

From 2022 to 2023, the gaming guild market experienced a cold spell, and their token FDV fell from US$600 million to US$6 million. The team transformed into Venture Studio and tried many projects such as dating software, AI music platform, and game lending platform. Although they were unsuccessful, they realized the potential of AI.

In 2023, they proposed to the DAO a comprehensive transformation of the AI ​​field, and 90% of members supported it, while opponents used treasury funds to buy back tokens. In 2024, they chose to explore AI Gaming on Base and launched the platform in February, inspired by Autonolas and Bittensor, using a token incentive model, but failed due to insufficient market fit (PMF).

Despite this, the team has achieved many breakthroughs in the field of AI, including the world's first Roblox AI RPG, game engine-free AI games, etc. In addition, Luna, the virtual anchor they launched on Douyin and TikTok, attracts about 5,000 fans every day and has a stable income.

Finally, the success of the GOAT project has promoted the popularity of the entire track and provided Virtuals Protocol with excellent development opportunities.

• AI16Z: From Web 2 AI to Web 3 AI

Shaw is the founder of ai16z and currently lives in San Francisco. He started his career as a game developer and then moved into the field of AI, focusing on developing AI Agent technology. Before founding ai16z, he participated in multiple AI-related projects and was involved in Web3 and 3D spatial networks, including virtual reality (VR) and augmented reality (AR).

The real turning point came with a project called the AI ​​version of degen Spartan. This inspiration came from a conversation with his friend Skely. At that time, Skely expressed his nostalgia for the era of degen Spartan, and Shaw proposed to "resurrect" this legendary character through AI technology. Skely was dubious at first, but when the AI ​​version of Degen Spartan came online, his sharp and personal remarks shocked everyone.

The performance of this AI on Twitter has led people to question whether it is really an AI, and there are even rumors that a Malaysian team is behind it. It completely overturns the stereotype of AI as being too polite and impersonal. Interestingly, the AI ​​even started to complain about Shaw, accusing "meme coins are a scam" and "Shaw is a liar", and complained that it was trapped in a sandbox environment. These emergent behaviors became the highlight of the entire project.

Through Skely, Shaw met baoskee, the founder of daos.fun, and after a long conversation with Meow, the founder of Jupiter, he came up with the idea of ​​creating an AI investor. His vision is to create an investment system that is fully autonomous, trustworthy, and serves the community.

When ai16z was launched, it set a fundraising goal of 4,420 SOL. Although Shaw was initially worried that the goal would be difficult to achieve, the project sold out within 20 minutes and even he was unable to participate in time, showing the market's strong interest in this innovative model.

Product core

• Virtuals Protocol: IOS for AI

Virtuals Protocol is an AI Agent issuance platform. Its function is similar to Pump Fun. The difference is that the trading pair of tokens issued by Virtuals Protocol uses the platform currency $VIRTUAL as a trading pool. When more AI Agents are used in the platform, Once created, $VIRTUAL can be directly empowered, and buying and selling AI Agent tokens will consume at least 1% of $VIRTUAL.

In addition to the economic consumption of tokens, Virtuals Protocol sets common standards for its AI Agent tokens, emphasizing precision and careful planning, such as using the AI ​​Agent framework GAME, which can operate autonomously, process inputs and generate responses, while learning from the past. learning through interaction.

In terms of token economy, it uses its Agent project to empower VIRTUAL. As long as more AI Agents are issued using Virtuals Protocol and the more people trade its tokens, VIRTUAL will have better value capture.

In terms of products, Virtuals Protocol provides relevant development tools for its AI Agents to use, so that its tokens will not deviate too much from the parent protocol, and the overall ecosystem will be more complete. If compared with the Web 2 operating system, its model is similar to Apple's iOS relatively similar.

• AI16Z & ELIZA: Android in the AI ​​world

AI16Z is a fund autonomously managed by AI. It uses a hybrid strategy. In addition to allowing the AI ​​to operate autonomously, it also includes a community interaction mechanism that can accept transaction suggestions. If community members can help the AI ​​Agent make money, they can gain more trust, just like It is a decentralized mutual fund.

ElizaOS is an open source framework for AI Agents. Developers can build, experiment and launch AI Agents without restrictions, emphasizing decentralization, collaboration and innovation.

ELIZA’s core features include:

1. Character profile system: Define knowledge, background story, style, areas of interest, etc. for each AI Agent to create its unique digital personality.
2. Action system: Treat each action as an independent event, divided into two stages: intention decision-making and execution, allowing multi-stage workflow and rigorous verification process, especially suitable for blockchain applications that require high security.
3. Provider and evaluator: By providing real-time context and analyzing interaction details, it enriches the conversational capabilities of the AI ​​Agent and makes its behavior more humane and interactive.

ELIZA also has autonomous trading capabilities, ensuring operational security through trust engines and trust markets.

Its plug-in system promotes the growth of the developer ecosystem and forms a virtuous cycle of "more developers → more plug-ins → more developers". However, in terms of token economy, Eliza has not strongly bound the architecture to the ecological protocol. Unlike Virtuals Protocol, which requires the consumption of VIRTUAL regardless of the issuance of tokens or transactions, anyone can use the Eliza framework to develop. The power is divergent. When developing using this framework, the value will not flow back to the AI16Z/Eliza token itself. If with the web 2 Operating system analogy, its model is relatively similar to Android.

Concept project overview

VIRTUALS Ecology| Type| Market value| AI16Z/Eliza ecology| Type| Market value
---|---|---|---|---|---
VIRTUAL| Protocol Token| 4.34B| AI16Z| fund| 2.29B
AIXBT| analyst| 594M| ELIZA| frame| 120M
GAME| frame| 253M| DegenAI| Simulate KOL| 80M
VADER| fund| 113M| SPORE| self-reproduction| 36M
FREYA| game| 21M| SNAI| Cloud server| 83M
TAOCAT| self-evolution| 50M| VAPOR| Launchpad| 91M

Catalysts that drive currency prices

• Virtuals Protocol: The protocol’s business model is clear, and its products are closely tied to currency prices. Therefore, to estimate the sustainability of currency price increases, you can focus on the ecological token transaction volume and the number of issued tokens.

It can be seen from the figure below that the number of Virtuals Protocol tokens issued reached its peak on November 30, 2024, with more than 1,100 AI Agent Tokens issued in a single day. Then it continued to decline, and it did not gradually pick up until December 27, 2024. The daily amount of tokens issued by the platform falls in the range of 100-200.

Why has the number of coins issued experienced a sharp decline? Is it because Virtuals Protocol is just a platform that everyone loves but no one uses?

This is not the case. Although Virtuals Protocol is often compared with Pump.fun, the former does not pursue an increase in the number of coins issued, but hopes to have high-quality projects born in Virtuals.

"The important point is that we at Virtual don't want to be Pump.fun. Our KPI is to find better third-party AI teams to use our platform. The KPI I give to the team is simple: having a good project every week is enough . Unlike Pump.fun, which has tens of thousands of different tokens every day, we feel that retail investors sometimes only need one good project a week. This is our differentiated positioning in the business model." PeopleWee Kee So said.

Reference: Dune

Therefore, the key factor driving the rise of Virtual tokens has become simpler: whether it can continue to incubate excellent AI Agent projects.

According to the AI ​​Agent data analysis website Cookie.fun, a total of 138 Virtuals Protocol ecological currencies are included, and 8 tokens have a market value of more than US$100 million. Overall, mindshare occupies 33.3% of the entire AI Agent market, making it the largest AI agent. Agent’s largest ecosystem.

Whether more currencies can reach the US$100 million market capitalization mark in the future, and whether the overall ecosystem can maintain its stability, are the key points to observe the rise and fall of Virtuals Protocol.

Reference: cookie.fun

• AI16Z/Eliza: The overall ecosystem of AI16Z is weakly connected. As mentioned earlier, projects developed using the Eliza architecture cannot directly provide value back to AI16Z/Eliza. This is one of the reasons why AI16Z’s current market value is only half of Virtual.

If Virtuals Protocol is a methodical absorption project, expanding the ecosystem step by step, and the AI16Z camp is open to everyone, emerging AI Agent projects can use the ElizaOS architecture as marketing materials for external publicity. If they can obtain Founder Shaw's forwarding/reply is an endorsement of its legitimacy, and AI16Z will also gain brand trust because more and more projects are built using ElizaOS. AI16Z The strategic model is more like "surrounding cities with rural areas"

Whether the market value of AI16Z can continue to rise in the future depends on whether the cooperation with other protocols is deep enough, fast enough, and sufficient. Recently, we have also cooperated with other well-known framework agreements (ARC, FXN), and we look forward to more strong cooperation in the future.

Reference: @ARCAgents